International Development (Official Development Assistance Target) Bill

Lord Tugendhat Excerpts

Friday 23rd January 2015 Lords Chamber

[Lord Tugendhat (Con)]

My Lords, like my noble friend Lord Fowler, I begin today by saying a word or two about my dear friend Leon Brittan. A lifelong friend, I met him in our first week at Cambridge in 1957. He was a man of outstanding ability—generous, loyal, wise and of the utmost integrity—who gave great service to this country. I mourn him deeply and pay tribute to his character, life and achievements. I want, from this Chamber today, to send my condolences to his wife Diana and to my former colleague, Sam Brittan, with whom I was once on the Financial Times. It is a very, very sad day for me.

Like the noble Lords, Lord Lipsey and Lord Shipley, I, too, was on the Economic Affairs Committee under the leadership of my noble friend Lord MacGregor, who very much regrets that he cannot be here today. I repeat the point that they made: it issued a unanimous report that was against coming down in favour of the 0.7% target, with Conservatives, Liberal Democrats, Labour and Cross-Benchers, all of whom had seen the same evidence, reaching the same conclusion. I stress that this does not mean that we were against development aid. We all want poor countries, and especially poor people in poor countries, to escape from poverty and we all agree that British aid has an important and continuing role to play. In that connection, we were very pleased to hear that DfID is widely regarded as one of the most effective and efficient operators in the field—a point made by the noble Baroness, Lady Royall, and by the noble Lord, Lord Chidgey.

However, to set an expenditure target that must be met, come what may, as a legal obligation, is never a good idea. It will deprive government of flexibility to respond to changing circumstances, whether here or in the recipient countries. It is also bound to lead to distortions and misallocations, as administrators strive to spend given percentage amounts, on an annual basis, of what are bound to be multi-year programmes, instead of in accordance with the practical needs and rhythms of those programmes. In my view, the noble and right reverend Lord, Lord Williams of Oystermouth, made exactly the wrong point when he talked about the target helping good administration, while the noble Lords, Lord Lipsey and Lord Shipley, made exactly the right point.

I do not oppose the target just because it is set in this field—far from it. I would oppose it in any area of expenditure and believe that in setting it in one, we are establishing a very bad precedent which is likely to be followed in others. I very much hope that the Minister will give an assurance, as far as she is able, that the Government do not regard this as a precedent. If the Government do not regard it as a precedent, why do they think it is such a good idea on this occasion?

In this particular case, there is an additional problem that we need to consider. The Government are rightly shifting the emphasis of the aid programme to the more fragile and needy states, but those, by definition, are often the states where Administrations are weakest and the temptations to corruption greatest, and where the pressures of the powerful elites, to which the noble and right reverend Lord, Lord Williams, referred, can also be very considerable indeed. I am afraid that the provisions of Clause 5 are very unlikely to put up a substantial barrier to the difficulties that are going to arise.

I would also like to draw attention to the extent to which the landscape of international development has changed in recent years—a point made by the noble Lord, Lord Purvis. Aid used to be a major element in the flow of capital to developing countries. Now, although it has increased greatly since the 1970s, when the 0.7% target was set, it is dwarfed by private flows by about nine to one. The major elements in the private flows are not just investment—foreign direct investment and portfolio investment, very important as they are—but the remittances from citizens of developing countries working abroad also play a major role and are, indeed, very much more substantial these days than aid itself. If we want to be more helpful, we should be encouraging still further the investment by corporations—private and foreign direct—as well as finding ways to help those who have migrated to developed countries such as ours to send remittances home. That would be something practical that we could do.

Finally, I ask the House to remember that development aid is no longer something that flows only from western countries to developing countries. Important new players in the game—China, India and Brazil—have joined Japan as substantial providers of aid. We should welcome this, particularly this week, when so much attention is being given to the proportion of the world’s wealth in the hands of the top 1%. Oxfam, I read in the Guardian, claims that the 85 richest people on earth have the same wealth as the 3.5 billion poorest. As we all know, a significant number of those 85 are to be found in India, China and Latin America. They, among others, should be doing much more to help relieve the poverty in their countries and elsewhere in the developing world.

--- Later in debate ---

[Baroness Northover]

I have in my notes an answer to the noble Lord, which was slightly lower down in what I was seeking to address. He said that he was mystified as to why we were dealing with this now. What occurred to me was that I was somewhat mystified that the previous Government had not legislated for this, despite their commitment. What we should welcome—and that is true across this House—is that we have finally ensured that we have met that 0.7% commitment, and that we are now seeking to legislate. That is the important thing and I welcome the cross-party support for it.

The House of Commons has passed the Bill overwhelmingly and handed it to us. It is now our responsibility to help ensure that my noble friend Lord Purvis is able to carry this through and into law. We have heard outstanding and compelling speeches and even those who feel that this is not the right move—

[Lord Tugendhat]

I take the Minister’s point about the responsibility to carry it forward into law, if that is what the majority want. However, I hope she will agree that this is an amending and revising House, and that there is a duty to seek to amend and improve Bills, regardless of where they are. I think back to the debate we had some months ago on the referendum Bill where many noble Lords opposite, whom I supported, argued that just because such a Bill had a majority in the Commons that was no reason not to try to improve it in the Lords. The same applies on this occasion.

[Baroness Northover]

I will be coming on to that in a while. Perhaps the noble Lord will be satisfied to wait a little for that.

As I have said, we have heard outstanding and compelling speeches which have recognised that aid is transformational. It is also interesting to note that even those who do not feel that this is the right move are committed in terms of aid, which of course is important. The noble Lord, Lord Lipsey, is an economist and not one to misuse statistics, but he expressed more than 90% agreement to what we are doing in terms of aid. I for one will bank that. I knew that we would have a powerful debate on this Bill, that noble Lords would speak from huge experience, and that we would take a far-reaching international perspective.

We know only too well that no man is an island—I might feminise that. As my noble friend Lord Purvis made clear, the first point to make is the moral case, and many noble Lords have made that case. Indeed, it was made with particular power by the right reverend Prelate the Bishop of Derby and—not least through his presence here—the former Archbishop of Canterbury the noble and right reverend Lord, Lord Williams of Oystermouth. I welcome his engagement, and we are pleased to see them involved today. My noble friend Lord Steel quoted strong passages from two global religions as to why we must do this. We heard my noble friend Lord Chidgey’s moving account from Juba, as well as those from the noble Lord, Lord Judd, and others. They all made the moral case exceptionally clear.

As noble Lords also laid out, we recognise our interests and how we are all interlinked. We can see that a weak health system in Sierra Leone, seemingly a distant place, results in an epidemic taking hold on an unprecedented scale. Even in Britain we have felt the effects of that. International development is not an optional extra or an afterthought; it is vital. Investing now to help the poorest can and will prevent some of the terrible situations we see today from happening tomorrow and affecting us. I was especially struck by the powerful speech of the noble Lord, Lord McConnell, about what might have happened had this measure been implemented 40 or 45 years ago. The noble Baroness, Lady Royall, quoted Nelson Mandela saying that:

“Poverty is not an accident”,

while my noble friend Lady Manzoor talked about tackling poverty.

The 2004 report of the UN High-Level Panel on Threats, Challenges and Change, of which our colleague the noble Lord, Lord Hannay, was a leading member, noted the interconnectedness of our world. That was a very important conclusion for the panel to come to. I shall quote from the report:

“Development and security are inextricably linked. A more secure world is only possible if poor countries are given a real chance to develop. Extreme poverty and infectious diseases threaten many people directly, but they also provide a fertile breeding-ground for other threats, including civil conflict. Even people in rich countries will be more secure if their Governments help poor countries to defeat poverty and disease by meeting the Millennium Development Goals”.

Quite so, and that underpins the powerful speech of my noble friend Lady Falkner about what other countries should be doing. It is excellent that at least we are taking the lead in this.

One of the most important principles of effective development is to ensure continuity. It is no use moving into a development programme one year and abandoning it the next. Continuity and certainty of programmes over a number of years are essential to securing good development outcomes. That is why we have committed to budgets over four years and why a Bill such as this, which commits us to spending 0.7% of our national income, is so important. There is otherwise the risk that the international development budget will fluctuate and fail to provide our partners with certainty when they need to make critical investments in health and education. I can recall, as no doubt can other noble Lords, when Ireland was delighted to make the commitment that it would reach an aid budget of 0.7% by 2007. I remember that that happened after an internal struggle. I also recall, with great disappointment, how quickly it moved away from that—and it is not yet achieved. Neither, prior to 2013, did we in the United Kingdom achieve it.

There is voter pressure in the United Kingdom for other budgets; for example, for the Department of Health, the Department for Education, and the DWP. Their budgets are very large, as my noble friend Lady Barker pointed out, and they are, largely, predictable. That has never been the case for overseas aid. The pressures are very clear as regards that budget, yet we seek to support similar projects: for example, getting girls into and through schools, and establishing and maintaining clinics, as the noble Baroness, Lady Tonge, rightly demanded of us.

I hope that the noble Lord, Lord Tugendhat, recognises that need for predictability. I am sure that he supports our long-term financial commitment to the EU—would it not be easy to push that budget back and forth?—yet we grant to the EU according to our legal obligation, and we are right to do so. The EU can then plan and budget. This is no different. The conflict across borders—

[Lord Tugendhat]

It is totally different. The problem that I—and I think other members of the committee—have is that while we are fully supportive of aid and made that quite clear, we also made it clear that we are worried, as are others, about the way in which money is spent. We are dealing with multiyear programmes. With such programmes, you will run into a lot of trouble if you have to spend on what is called—since the noble Baroness invokes Europe—the douzième provisoire: that is, if you have to spend one-12th on an annual basis instead of spreading it over the commitment. In the case of the EU, there is a formula by which the member states are assessed, and we pay according to that formula. However, it is not linked to projects. The problem here is that you have a multiyear project and you are saying that a given amount has to be spent each year. The Minister may or may not agree with me, but she is invoking a false parallel.

[Baroness Northover]

Having been a Minister in the Department for International Development, I know that there is obviously flexibility in the department, because humanitarian conflicts will arise, which you have to put money into, while you also sustain support for various other projects. The noble Lord might read the NAO report; one of the things that struck me when I read it was that every department in government has to budget, and they know more or less what their budgets will be. There may be contingencies, and they may have a contingency fund, but they have to plan. It is not just left to what they may decide to do after six months or so.

The situation is no different in DfID. I assure the noble Lord that if he reads the NAO report very carefully he will see that it concludes that business was properly stress-tested and assessed. I think I should proceed, because I am now on 14 minutes, and I will come on to some of these other points. I will also be happy to meet the noble Lord after this debate, if that would help, so that we can explore some of those issues.

Noble Lords will be fully aware of the kind of projects that DfID is involved in; during this debate noble Lords have very helpfully outlined a number of these areas. A number of noble Lords emphasised in particular our support for women and girls and how right this is, including my noble friends Lady Hodgson, Lady Jenkin, Lady Manzoor, and the noble Baronesses, Lady Kinnock and Lady Flather. We fully recognise the importance of supporting women and girls and thank noble Lords for supporting us in doing that. In addition, as part of that, the emphasis on maternal health and family planning was mentioned by the noble Lord, Lord Watson, as well as by the noble Baronesses, Lady Tonge and Lady Flather.

Mention was made of women giving birth on a concrete slab. Today is my eldest son’s birthday. This morning I found myself thinking that, had I given birth in a developing country, he would have died and so would I. Noble Lords who think about it will probably recognise that either they or their close family might very well have been in that situation. As has been said, poverty is not an accident. It is not something that certain groups need to suffer from or should suffer from.

Noble Lords have made mention of our commitment of 0.7%, and some have suggested that the increase has not improved the quality of that spend. I assure them that the Development Assistance Committee of the OECD concluded recently in its formal peer review of DfID on the effectiveness of the way in which we have scaled up our spending in recent years, planning carefully to meet the target—and I have seen that this is very much the case—while at the same time increasing the quality of our spend. As noble Lords were speaking, I found myself thinking about the commitment that we have been able to make, for example, on so-called neglected tropical diseases. We hope that they are no longer neglected, so we can combat blindness, which is totally avoidable—something that we were able to do because of the increase in the budget.

In response to the noble Baroness, Lady Tonge, of course there are many lessons to learn from Sierra Leone. This was an unprecedented crisis. We have done a huge amount, as was noted during the debate, to ensure that it did not become a pandemic. She will know the details of our support there.